Building a strong credit score early in life lays the foundation for financial independence. Students and first-time earners often underestimate the long-term benefits of responsible credit management.
Begin with a secured credit card or low-limit card. Small monthly transactions and timely payments help build repayment history.
Use less than 30% of your credit limit to maintain a healthy utilization ratio. High utilization negatively impacts score even when payments are on time.
Timely repayment is the most influential factor in credit score calculation. Set reminders or use auto-debit facilities.
Review your credit report at least twice a year to identify discrepancies or unauthorised inquiries. Rectifying errors early prevents long-term score impact.
Each loan application generates a hard inquiry, temporarily reducing credit score. Space out applications and apply only when necessary.
Establishing disciplined credit behaviour in early years significantly enhances future borrowing potential, enabling access to affordable loans and premium credit products.